Best Buy Gets the Most for Its Money This Black Friday

Best Buy was the most efficient major retailer when measured by incremental store visits per ad dollar, followed by JC Penney, Walmart and Target

November and December are high stakes months for retailers. It’s a period when more than one-fifth of annual sales occur, swelled by consumer spending in-store and online for holiday gifts. Although retailers’ year-end marketing programs and consumer holiday purchases continue to be pulled forward, the shopping season doesn’t begin in earnest for many people until Thanksgiving arrives.

For many years, Black Friday sales promotions have defined the retail environment during the long Thanksgiving weekend. Despite evidence that Black Friday has lost some of its luster, it remains a very large shopping event and is actively contested by major retailers. Indeed, according to the NRF, close to 102 million consumers shopped in brick-and-mortar stores over the Black Friday holiday weekend. Merchants spent over a billion dollars on advertising in the run-up to the big holiday shopping weekend to pull in their share of these shoppers. Which retail advertisers got a strong ROI this year in the form of in-store traffic and which ones lagged?

To answer this question, Kantar Media and location insights specialist Placed Inc. merged their respective data on advertising expenditures and in-store visits to evaluate the amount of incremental store visits per dollar of advertising. The measure provides a way to compare the results achieved by top national retail chains over the four-day Thanksgiving weekend.

For the analysis, Kantar Media used its syndicated monitoring data and developed preliminary estimates of retailers' multimedia ad spending for the period of November 2-25 (the day before Thanksgiving). Placed used its opt-in location panel and tracked visits to retail stores, comparing the four-day Thanksgiving weekend (November 26-29) to a benchmark period four weeks earlier (October 29-November 1) and calculating the lift in store visits for each retailer.

Best Buy, JC Penney Gain the Most

To understand the relationship between a retailer’s ad spending and the lift in store visits we calculated the ‘lift visits per ad dollar’, which is a measure of efficiency. To compare relative performance across retailers, we converted this measure to an index scale. The highest lift visits per ad dollar was assigned an index of 100 and all other values were scaled against it.

The table below presents results for a select group of retailers:

In the aggressive competition among department stores and mass merchandisers, JC Penney topped its primary rivals with an efficiency index of 75. It spent $25.3 million on advertising and received 132% more store visits compared to the benchmark period, also the best performance of the retailers we analyzed. However, the big lift in JC Penney store traffic is a mixed signal. It comes off a baseline rate in the lower half of its competitive set but also indicates that customers still give consideration to the store as a shopping destination.

Walmart had an efficiency index of 65 and Target was close behind at 63. Walmart’s big advantage in spending ($80.9 million versus $47.7 million for Target) was offset by a smaller lift rate in store visits. Compared to 2014, Target nearly tripled its lift rate while Walmart’s only rose a few points. This may be partially due to Walmart’s greater focus on driving sales throughout the entire month of November by releasing offers earlier and also promoting online deals. Walmart is also top-ranked in store traffic, and with consumers already going there so frequently for everyday needs it’s expected that they would have less room to grow over the holiday weekend.

At the other end of the rankings, Macy’s had an efficiency index of 33 which was the lowest of all twelve retailers in the analysis. Like JC Penney, Macy’s more than doubled the foot traffic into its stores from a low benchmark level but spent much more heavily on advertising (nearly $50 million) to help accomplish it, affecting the efficiency index.

Among the big box home improvement stores, Lowes and Home Depot battled to a draw. They had nearly identical efficiency index scores (45 and 44, respectively) and similar visit lift rates (34% and 36%, respectively). A significant proportion of the pre-Thanksgiving ad spend from each retailer was for holiday decorations.

Consumer electronics are a popular item on consumer’s shopping lists for Black Friday deals and Best Buy stood up to the retail challenge posed by mass merchandisers. Leveraging $24.2 million of ad expenditures, Best Buy had a 125% lift in store visits. It produced the best ratio of lift visits per ad dollar among all retailers analyzed, thus earning an efficiency index of 100.

Black Friday Messaging Comes into Focus Later

Leading up to the big retail sales weekend, Kantar Media also examined the TV ad messages from our select group of retailers. Specifically, we identified ads with a direct mention of Black Friday in their messaging. Compared to last year, a majority of retailers reduced their emphasis on Black Friday messaging in TV advertising.

When we examined the timing of Black Friday messaging by these retailers, a subtle shift in tactics became apparent. Not much has changed in the message mix during the last three days of the analyzed time period, which is the Monday thru Wednesday of Black Friday week. It was still dominated by announcements promoting the Black Friday sales event and special deals. It was during the previous week that merchants cut back on Black Friday themed ads and instead devoted a larger share of budget to generic ‘on sale’ messages that weren’t tied to Black Friday.

While there have been numerous reports that Black Friday is backfiring on retailers and consumers are more resistant to its appeal, it still seems to play an important role in retailers’ promotional plans. However, it’s increasingly part of a broader combination of holiday promotions and discounting that starts earlier in November and continues throughout the shopping season. At each point, retailers are tactically supporting today’s deal with today’s advertising to try and capture today’s purchases. When Black Friday is 3-4 days away, timing dictates that ad messaging start providing support, not because it’s Black Friday but because it’s the next event on the marketing calendar.

Ultimately, the holiday shopping season is a marathon, not a sprint – and winning Black Friday is just the beginning. Kantar Media will continue to release research throughout the season to keep you informed, so please visit kantarmedia.us or follow us on Twitter at @kantar_media to see our latest updates and stay ahead this holiday.

About Kantar Media

Kantar Media is a global leader in media intelligence, providing clients with the data they need to make informed decisions on all aspects of media measurement, monitoring and selection. Part of Kantar, the data investment management arm of WPP, Kantar Media provides the most comprehensive and accurate intelligence on media consumption, performance and value.
For further information, please visit us at www.KantarMedia.com.